Well it turns out I forgot to hit publish on this post yesterday – better late than never!
As you may have read in my previous post, Market Report – Bidding War, the Orlando real estate market has shifted. Long gone are the days of 26,000 listings to choose from and offering $100,000 less than asking price. If you are a buyer in today’s market times are tough. That doesn’t mean it’s not a great time to buy. It just means the strategy for offering has changed.
You might wonder why things are so tough for buyers. Well…the listing inventory has declined about 17% since this time last year. And it hasn’t been this low since the boom days of 2005. The demand is extremely high, especially for homes in good condition or location. If the level of demand we are seeing in certain Downtown Orlando neighborhoods keeps up, this strong sellers market could go on for a while longer. It’s not just cash investors out there buying up homes - although there are many of those. There are mainly three types of buyers:
1. The buyers who have been looming for the past 2 or 3 years
thinking they were going to wait until the prices hit bottom have now
realized they missed that opportunity and are rushing to get in before
prices rise much more.
2. Investors – prices are still affordable and they are eating up
much of the inventory in good locations anticipating a high return in
3. Regular buyers – those who are just now in a position to buy and
ready/willing/able. Perhaps they finally have equity to sell their
home and move up or they finally have a strong job history.
So why buy in Orlando? Even with the lack of inventory and multiple offer situations, interest rates are still amazing and you really can’t complain about getting a 30 year loan for under 4%. On top of that, the rental market is very strong and with increasing rental prices it can still be more affordable to buy than rent. The housing affordability in the Orlando area is still at around 220%! An affordability index that is over 100 means that median-income earners make more than is necessary to qualify for a median-priced home.
The key to buying in every market is to not get emotionally attached. It’s very difficult because most of us make decisions based on emotions rather than logic. Just remember the home you’re falling in love with…well so is everyone else. Take a step back, be patient and be willing to offer above asking price when it is appropriate. You will eventually have a place to call home.
I don’t want to share all of my secrets; but one of my strategies lately is to look for houses that have been on the market longer than 30 days. Those listings might be overpriced. Get in and make an offer before the seller drops the price and then you’re in another bidding war! Contact me today to learn more about finding a home in this challenging market.
*Stats from Orlando Regional Realtor Association